With the Bush White House projecting a $304 billion federal deficit this year, plus annual flows of red ink as far as the eye can see, it's fair to say that Ross Perot's crazy aunt is back. In the 1992 campaign, the folksy, jug-eared Texas zillionaire rode public anxiety over the stagnant economy  specifically the burgeoning national debt he compared to a crazy aunt in the basement no one wanted to mention  to the best third-party showing in a presidential election in 80 years. Budget deficits became such a potent political issue that Bill Clinton was forced to abandon much of his economic agenda so he could push through a deficit-reduction plan in 1993. A year later, a pledge to cut spending and eliminate the deficit helped sweep Newt Gingrich's House Republicans into power for the first time in 50 years. The lesson: politicians who didn't pay homage to balanced budgets paid later, at the polls.

Or so it seemed. After a few golden years of surpluses, deficits are back with a vengeance. Though he ran for office promising to keep the government treasury in the black, Bush's budget proposal predicts deficits of more than $300 billion through 2004  and doesn't envision a new surplus in any year before a second Bush term would end. Bush claims he made it clear in the 2000 campaign that he would accept deficits in times of war, recession or national emergency, though White House staffers have failed to find an instance when he actually said that. In any case, says Mitch Daniels, Bush's budget director, "a balanced budget is a high priority for this administration; it is not the top or the only priority."

Have deficits lost their political sting? "The public still doesn't like red ink," says Frank Luntz, a GOP consultant who advised Perot. "But they're willing to pay now for national security, and an economic recovery, and deal with deficits later." The White House is betting Luntz is right. The deficits, Bush aides claim, are manageable; as a percentage of GDP, they still don't rival those faced by Ronald Reagan and the current president's father. "Nobody likes deficits, but the public will give this president the benefit of the doubt," adds one Bush adviser. "They liked Perot because he was a straight-talker; they like Bush for the same reason."

But the public may not be quite so easy to placate. A TIME/CNN poll conducted last week shows that 73% of Americans are either "very" or "somewhat" concerned about deficits that could result from the Bush budget proposal. More than a third  36%  think the Bush plan will make the economy worse, while only 27% think it will make the economy better. And fully 55% of the respondents describe economic conditions today as "poor" or "very poor"  the highest figure since December 1993.

A few Republican lawmakers are worried about sullying their reputations as deficit hawks in order to support their man in the White House. On Capitol Hill, key GOP senators like Finance Committee Chairman Charles Grassley and Olympia Snowe have suggested that the crown jewel of Bush's latest tax cut  the $300 billion elimination of dividend taxes  costs too much and does too little to help stimulate the economy in the short term. As a matter of pure policy, says Grassley, he likes the idea. But "it's one of the weaker links in the president's proposal, in regard to what's politically possible." Former GOP Senator Warren Rudman, who is co-chair of the anti-deficit Concord Coalition, suggests many of his erstwhile compatriots have forsaken principle for politics. "I suppose if we had a Democrat in the White House," he complains, "Republicans would go ballistic."

Democrats, of course, are going ballistic over Bush's budget imbalance, blaming his tax cuts ($1.3 trillion in 2001, at least another $674 billion in his new plan) and excoriating him as a reckless steward of the economy. They point out, accurately, that Bush's projected deficits don't even taken into account the cost of a war with Iraq (another $50-200 billion), or his promise to reform Social Security (estimated cost: $1 trillion). Not that the Democrats have a plan of their own to stem the flow of red ink, which would require spending cuts few are willing to embrace. Still, a growing deficit "is powerful short-hand for fiscal mismanagement and incompetence," says Jim Jordan, campaign manager for presidential hopeful Sen. John Kerry, with evident relish.

White House policy makers were counting on Federal Reserve Chairman Alan Greenspan to throw them a lifeline this week by endorsing the president's budget in testimony before Congress. But the Oracle disappointed. Like Grassley, he said eliminating double-taxation on dividends was, in principle, a good idea. But he took issue with White House assurances that the current deficits are "manageable" and will vanish once the economy revives. Privately, Bush aides now concede that the president's budget proposals have hit a wall. "Nothing will move," says one, "until the war is over."

Will it hurt Bush's re-election chances next year that his record as president will include the return of massive deficits? If he crushes Saddam Hussein swiftly  and, most importantly, if the economy rebounds  probably not. Otherwise, expect the economic debate in 2004 to sound a lot like the one in 1992, complete with references to a certain crazy aunt living in the nation's basement.